Stockholders Equity: Transactions and Balance Sheet Presentation

Torey Corporation was organized on April 1, with an authorization of 25,000 shares of six percent, $50 par value preferred stock and 200,000 shares of $5 par value common stock. During April, the following transactions affecting stockholders equity occurred:

Apr.	1	Issued 80,000 shares of common stock at $40 cash per share.
	3	Issued 2,000 shares of common stock to attorneys and promoters in exchange for their services in organizing the corporation. The services were valued at $31,000.
	8	Issued 3,000 shares of common stock in exchange for equipment with a fair market value of $55,000.
	20	Issued 6,000 shares of preferred stock for cash at $80 per share.

Required

Required

a. Prepare journal entries to record the above transactions.

General Journal

Date

Description

Debit

Credit

Apr.01

AnswerCashCommon StockEquipmentOrganization CostsPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred Stock

Answer

Answer

AnswerCashCommon StockEquipmentOrganization CostsPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred Stock

Answer

Answer

Paid-in-Capital in Excess of Par Value - Common Stock

Answer

Answer

Issued shares of common stock.

Apr.03

AnswerCashCommon StockEquipmentOrganization CostsPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred Stock

Answer

Answer

Common Stock

Answer

Answer

AnswerCashCommon StockEquipmentOrganization CostsPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred Stock

Answer

Answer

Issued common stock for organization costs.

Apr.08

AnswerCashCommon StockEquipmentOrganization CostsPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred Stock

Answer

Answer

Common Stock

Answer

Answer

AnswerCashCommon StockEquipmentOrganization CostsPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred Stock

Answer

Answer

Issued common stock for equipment.

Apr.20

AnswerCashCommon StockEquipmentOrganization CostsPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred Stock

Answer

Answer

Preferred Stock

Answer

Answer

AnswerCashCommon StockEquipmentOrganization CostsPaid-in-Capital in Excess of Par Value - Common StockPaid-in-Capital in Excess of Par Value - Preferred StockPreferred Stock

Answer

Answer

Issued shares of preferred stock.

b. Prepare the stockholders equity section of the balance sheet at April 30. Assume that the net income for April is $60,000.

Stockholders' Equity
	Paid in Capital
	AnswerPreferred StockCommon StockRetained EarningsTotal Stockholders' EquityTotal Paid-in-Capital	Answer
	AnswerPreferred StockCommon StockRetained EarningsTotal Stockholders' EquityTotal Paid-in-Capital	Answer	Answer
	Additional Paid-in-Capital
	Paid-in-Capital in Excess of Par value - Preferred Stock	Answer
	Paid-in-Capital in Excess of Par value - Common Stock	Answer	Answer
	AnswerPreferred StockCommon StockRetained EarningsTotal Stockholders' EquityTotal Paid-in-Capital		Answer
	AnswerPreferred StockCommon StockRetained EarningsTotal Stockholders' EquityTotal Paid-in-Capital		Answer
	AnswerPreferred StockCommon StockRetained EarningsTotal Stockholders' EquityTotal Paid-in-Capital		Answer